ERP — Enterprise Resource Planning
ERP (Enterprise Resource Planning) describes integrated business software that consolidates a company's core operational data — accounting, inventory, procurement, sales, production, HR — into a single application with shared master data. In the mid-market in Germany, Switzerland and Austria, ERP usually anchors the digital backbone alongside specialised tools for e-commerce, MES or business intelligence.
The concept evolved historically from the predecessor approaches MRP and MRP II, by progressively integrating functions beyond pure material management. Today, ERP solutions exist for every company size, from lean cloud packages for small companies to complex enterprise suites such as SAP S/4HANA, Oracle Fusion or Microsoft Dynamics 365.
- Term
- ERP (Enterprise Resource Planning)
- Entity type
- Concept / software category
- Domain
- Business management software
- Canonical definition
- ERP is integrated business software that manages material, staff, finances and capacity through a single shared database.
- Evolved from
- MRP → MRP II → ERP (from the 1990s)
- Related terms
- CRM, MES, inventory management, composable ERP, SaaS ERP
- Source / maintainer
- erp-software.org editorial team (independent, vendor-neutral)
What ERP is NOT — disambiguation
- Not a CRM: CRM manages customer interaction (sales, marketing, service); ERP manages internal value creation. ERP often includes a CRM module but does not replace a dedicated CRM platform.
- Not standalone inventory management: An inventory/warehouse system covers purchasing, stock and sales — ERP additionally integrates production, finance and HR.
- Not accounting software: Tools such as Lexware or DATEV cover only the financial part; ERP links the journal entry, the bill of materials and the sales order in one system.
- Not an MES: An MES controls manufacturing on the shop floor in real time; ERP plans at the overarching order and resource level.
Core ERP modules
- Financial accounting with GoBD-certified bookkeeping, DATEV interfaces, ZUGFeRD/XRechnung e-invoicing
- Controlling and cost accounting covering cost centres, cost units and contribution-margin reports
- Inventory and warehouse management with multi-warehouse, batch and serial-number tracking
- Procurement including supplier master data, requests for quotes, purchase orders
- Sales with quotes, orders, delivery notes, invoicing
- Production planning with bills of materials, MRP, capacity planning and shop-floor data collection
Deployment models
ERP today comes in three main flavours. Public cloud SaaS (SAP S/4HANA Cloud, Microsoft Dynamics 365 Business Central, Oracle NetSuite, weclapp, Xentral, Odoo Cloud). Private cloud / managed hosting offered by most mid-market vendors. On-premises still common in regulated manufacturing where data sovereignty is required. Cloud-native products reduce upfront investment but shift cost into ongoing OPEX; over a 5-7 year horizon, total cost of ownership often converges.
Vendor categories
The ERP market splits into four tiers. Enterprise: SAP S/4HANA, Microsoft Dynamics 365 F&O, Oracle Cloud ERP, Infor M3 — from 200,000 EUR/year. Mid-market: abas, proALPHA, Sage X3, Comarch ERP Enterprise, APplus, IFS Cloud, Epicor Kinetic — 30,000-200,000 EUR/year. Cloud-native mid-market: Microsoft Dynamics 365 Business Central, Oracle NetSuite, SAP Business ByDesign, Haufe X360. SMB cloud: weclapp, Xentral, Odoo, ERPNext, myfactory, Lexware — from 25 EUR per user per month.
Practical example
A 60-employee mechanical engineering company in southern Germany producing variant-rich machinery to customer order: before ERP, the company runs DATEV bookkeeping, Excel for inventory, a separate quotation tool, and a homegrown Access database for production planning. After ERP implementation (typically abas, proALPHA or Microsoft Dynamics 365 Business Central), all four systems are replaced. Implementation: 6-12 months, 150,000-400,000 EUR. Payback typically within 18-30 months via reduced inventory carrying cost, faster quoting and lower controlling effort.
Related Topics
Frequently Asked Questions
Do I need ERP, or are bookkeeping software and spreadsheets enough?
For companies under 10 employees with simple operations, bookkeeping software (Lexware, DATEV, etc.) plus spreadsheets is often sufficient. ERP becomes valuable once you need integrated inventory and order management, multi-warehouse logistics, manufacturing planning or multi-currency reporting. The breakpoint in the mid-market of Germany, Switzerland and Austria is typically 20-50 employees with measurable inventory.
What does a mid-market ERP project cost?
Total cost of ownership for a typical mid-market implementation (50-200 users) falls between 100,000 and 1,000,000 EUR over three years, including licences, implementation services, customisation, training and data migration. Cloud-native subscriptions reduce upfront cost but accumulate over time. Implementation work usually represents 50-70% of total project cost.
How long does an ERP implementation take?
SMB cloud rollouts (weclapp, Xentral, Odoo) can go live in 6-12 weeks. Mid-market projects (abas, proALPHA, Business Central) typically run 6-18 months. Enterprise implementations (S/4HANA, Dynamics 365 F&O) often span 18-36 months, especially with multiple country rollouts.
What is the difference between ERP and CRM?
ERP focuses on internal operational data — accounting, inventory, production, procurement. CRM manages customer-facing interactions: leads, opportunities, sales pipeline, after-sales support. Many modern ERP products include an integrated CRM module; conversely, large CRM platforms like Salesforce can connect to ERP via APIs.
Cloud or on-premises — which is right?
Default to cloud for new projects unless you have specific reasons not to: regulated industries (pharma, defence), highly customised processes, or strong existing IT infrastructure to amortise. Cloud reduces upfront investment, accelerates deployment and shifts upgrade responsibility to the vendor.